Q1 2027 Indraprastha Gas Ltd Earnings Call
Speaker #3: Ladies and gentlemen, you have been connected for the Indraprastha Gas Limited conference call. Please stay connected; the call will begin shortly. Ladies and gentlemen, you have been connected for the Indraprastha Gas Limited conference call.
Speaker #3: Please stay connected; the call will begin shortly. Ladies and gentlemen, good day and welcome to the Indraprastha Gas Limited Q1 FY27 earnings conference call.
Speaker #3: Hosted by Philip Capital Private Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation.
Speaker #3: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touch-tone phone. Please note that this conference is being recorded.
Speaker #3: I would now like to hand the conference over to Mr. Nathan Trivari from Philip Capital Private Limited. Thank you, and over to you, sir.
Speaker #4: Thanks, Manav. Good day, ladies and gentlemen. On behalf of Philip Capital India Limited, I welcome everyone to Indraprastha Gas Limited's first quarter FY27 earnings call.
Speaker #4: Today, from the management team, we have with us Mr. Kumar Shankar, who has recently taken charge as MD of IGL. Congratulations to you, sir, and all best wishes for your tenure at IGL.
Speaker #4: We also have with us Mr. Mohit Bhatia, Director – Commercial. It's a pleasure to have you with us, sir. And Mr. Manjit Golati, who has recently been appointed as CFO at IGL.
Speaker #4: Congratulations to you as well, sir. I shall now hand over the floor to the management for their opening remarks. This will be followed by a question-and-answer session.
Speaker #4: Over to you, sir.
Speaker #5: Yeah, thanks, Nathan. Very good evening to all of you. I am Kumar Shankar, as Nathan was mentioning. I have recently taken charge as Managing Director of Indraprastha Gas Limited.
Speaker #5: On behalf of the management team of IGL, it's my pleasure to welcome you all to our earnings call on the financial results for Q1 FY2026-27.
Speaker #5: Thank you for your continued trust and support, and for joining us today. As you all know, the quarter was challenging due to the ongoing geopolitical situation in West Asia.
Speaker #5: This impacted global energy markets and created pressure on gas availability as well as prices. But despite these challenges, IGL continued to operate smoothly and ensured uninterrupted gas supplies to all our customer segments.
Speaker #5: We are happy to report that the requirement during this quarter was also met through domestic sources, which helped us maintain gas supply reliability. Our company has continued to demonstrate resilience through disciplined execution and a clear focus on our long-term goals.
Speaker #5: Before we begin the Q&A session, let me briefly share some of the key highlights of our performance during this quarter. With our continued efforts, we have achieved an average daily gas sales volume during this quarter of 9.66 million standard cubic meters per day, as against 9.13 million SCMD in Q1 of the previous year.
Speaker #5: Our overall sales volume of CNG, net of BTC and DMMTS, had actually increased by around 11%, with an overall 9% increase in CNG sales in Delhi, and double-digit growth in all the other remaining three states.
Speaker #5: So, in fact, you'll be glad to know that in recent days, we have touched the peak sale of up to even 58 lakh kg in a single day, which is not only among the highest for IGL in its history, but also definitely the highest in the country for any CGD company.
Speaker #5: And also, you’ll be glad to know that during this quarter, we have achieved a milestone of the highest ever quarterly turnover of more than ₹5,000 crore.
Speaker #5: And as far as our capex, we continue to invest in expanding and strengthening our PNG infrastructure, and our domestic PNG customer base has already reached around 3.5 lakh plus connections, while industrial and commercial connections stand today at approximately 13,600 connections.
Speaker #5: If we plan expansion of our pipeline network and CNG stations through our ongoing capital expenditure, we believe this will support our company's long-term and sustainable growth.
Speaker #5: During this quarter, the company reported an EBITDA of ₹296 crore and a profit after tax of ₹186 crore. Despite higher gas costs and supply challenges arising from the global situation, we remained profitable and continued to maintain stable operations during this quarter.
Speaker #5: We believe the long-term fundamentals of the CGD sector remain strong, with our growing infrastructure, expanding customer base, and disciplined approach to our business. We remain committed to creating sustainable value for all our stakeholders. Now, I would like to invite our Director Commercial, Mr. Mohit Bhatia, to share his remarks.
Speaker #5: Thank you.
Speaker #2: Thank you, Kumar sir, the MD. Good evening, everyone. I am Mohit Bhatia, Director – Commercial at Indraprastha Gas. I would like to, first of all, welcome all our investors, analysts, and members of the financial community joining us today.
Speaker #2: Thank you for participating in our earnings conference call for the quarter ended 30th June 2026. Let me take this opportunity and the privilege to share the key business developments during the quarter.
Speaker #2: First and foremost, to secure a proper, robust infrastructure in NCR and particularly in Delhi, I am pleased to inform you that we have recently commissioned one more City Gate station at Rohini, Delhi.
Speaker #2: This will improve the overall supply network and strengthen the infrastructure. We have already submitted our concern for the authorization for the remaining areas of Gurgaon and Faridabad, and have started technical feasibility studies for the development of both these geographical areas.
Speaker #2: We have also commenced the LNG operations, which is the first and foremost in the NCR region, in association with Concor, and had commissioned the newly operational CNG station at the prestigious Noida International Airport along with the PNG in the focus area.
Speaker #2: Going forward, we are also pleased to inform you that we have engaged with the Indian Army in a national mission-building exercise to explore opportunities to meet their integrated energy requirements in our geographical areas, specifically in their cantonments.
Speaker #2: As our Managing Director has highlighted some of the points related to the geopolitical situation, and also the financial performance of the company, let me add some perspective from my side on the company's performance.
Speaker #2: Overall, the sales volume increased by about 6% compared to the last quarter of last year. And if we look from the perspective of Delhi NCR PNG sales, yes, it has grown by 9%, as the Managing Director emphasized.
Speaker #2: And barring DTC and DIMS volume, that is 9%, whereas a healthy growth of around 27% is observed in our newer GS outside Delhi NCR. On an overall basis, almost 50% of the incremental sales is coming from the new GS.
Speaker #2: In terms of infrastructure development, our steel network expanded by approximately 25 kilometers, now reaching around 2,600 kilometers. Meanwhile, the MDPE pipeline increased by almost 500 kilometers during this quarter.
Speaker #2: So, we have also added almost 100,000 plus PNG customers during the current quarter, and almost 530 plus additional industrial and commercial customers, adding to our robust growth.
Speaker #2: On the financial front, once again, pleased to inform that we have achieved the ever highest Rs 5,028 crore of turnover, which is almost 16% higher as compared to the same quarter last year.
Speaker #2: While profitability has been impacted by higher gas costs during the quarter, our focus remains on volume growth, customer expansion, and operational efficiency.
Speaker #2: During the quarter, we also also had incurred a capex of 327 crores. We we are witnessing a very healthy growth in the CNG vehicle segment over the last six months in particularly CNG vehicle additions and convergence have arranged almost to the tune of 27,300 vehicles per month, with a with 18,000 vehicles per month during the same quarter for the last year, which gives us a immense confidence that CNG demand will continue to grow in the coming quarters.
Speaker #2: On behalf of the management, I assure you that we remain focused on sustainable growth, the expansion of our market presence, and delivering value to our customers and stakeholders, while adapting to the changing business environment.
Speaker #2: With this, I welcome you once again and open the session for questions and answers.
Speaker #1: Thank you very much, sir.
Speaker #3: We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.
Speaker #3: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.
Speaker #3: Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have our first question from the line of Probal Singh from ICICI Securities.
Speaker #3: Please go ahead.
Speaker #4: Thank you for the opportunity. Good afternoon, sir. Congratulations on the elevation to the new roles for both of you. I just had a first question with respect to the sourcing mix.
Speaker #4: If you can kindly give us a mix, in terms of percentage or absolute volume, between whatever was the OPM allocation, HPSP gas, fuel gas, and the mix between long-term and short-term energies.
Speaker #4: Whatever it was for the project, that was my first question.
Speaker #2: Okay. Okay. Thanks for the question. So the current scenario in the current scenario if we see the breakup for the Q1 for the this financial year, still we have around 48% coming from the domestic allocations, whether it is APM Newwell or HPHT.
Speaker #2: And around 52% is coming from the imported, that is through our long-term contracts and some from the spot also, because of the force majeure issues that happened in West Asia.
Speaker #2: So if you see, we are selling around 9.5 million standard cubic meters of gas, with about 48% coming from the domestic source and around 52% from imported sources.
Speaker #4: Thank you, sir. Is it possible to share, of that 52%, what was the mix between long-term and spot? Also, broadly speaking, what was the effective price at which we could get spot energy for the quarter?
Speaker #2: See, if we if you see because of the long-term contracts we already we are in place 100% of our sourcing however we do the however due to the force major issues and all so there has been some some cuts yes it is there so almost around 4 million out of the 5 million sourcing which is being done from the imported so around 3.9 to 4 million is the from the long-term contracts and there was a government has supported during this quarter in terms of giving a pool gas to the CDD sector particularly as per the government notification so around 0.6 to 0.7 came through the pool gas and spot we had to rely around 3% you can say roughly around 0.25 to 0.3 million per day was through spot and market trend you have must have noticed that it varied from around 17 18 dollars to 21 22 dollars as and when it required we have to source it.
Speaker #4: Got it, sir. And just in terms of how we are looking at things going forward, and you know, what is the environment you have seen since the conflict has once again sort of picked up?
Speaker #4: Have you seen a change in terms of anything's availability? Are we able to get slightly more contracted LNG in the market today, or does it remain a fairly tight market?
Speaker #4: What's your thoughts on this?
Speaker #2: So very very highly unpredictable and uncertain situation you are aware of the geopolitical issues so we are in constant constant touch with our suppliers the promoter companies also and whereas whatever best we could source it from the market so we are in constant touch and some indications are there whatever has been the cuts due to force measures because as globally India is also gone to other other geographies to source the gas and it has been there so long-term yes spot will be there a little bit but I think if we are able to get the the the gas from our long-term contracts our expiration our vision is that so I think we are taking up with our upstream suppliers and something should be better.
Speaker #4: And as we go forward, we are looking at HPST as well. So we are hopeful that we will be in a position to improve, you know, the overall share of HPST as well going forward.
Speaker #4: About RLNG, a commercial has already mentioned that. Thanks. One last question, if I may. Given the unpredictability, how should we look at the margin scenario going forward?
Speaker #4: Is there sort of a floor are we looking at further price increases to sort of shore up the margins if prices remain at the higher end of US I mean 15 to 16 dollars how are we looking at the margin environment for the next 61 months?
Speaker #2: So sir I actually I would like to answer your query in two parts see point number one is we have been always giving guidance of a long-term EBITDA around 7 rupees per HPM so yes there is a geopolitical issue across the globe and margins are under the stress so our still long-term guidance is similar but in the subsequent quarters it will be difficult viewing because we do not know what is the overall geopolitical impact on the country and in particular to the CDD sector so that is point number one secondly we have been always like a long-term guidance was there that we want to calibrate in terms of both the sales growth was always margin so we are trying to maintain a good delta with alternate fuels particularly petrol and diesel and still there is a handsome delta with petrol in particularly around 17 rupees and and with the GST 2.0 it has become really conducive and favorable for the CNG automobile sector and the tremendous growth has been witnessed and to further leverage I think this is a this is a time to seed the market to further strengthen and capture the volumes also.
Speaker #4: See, I would like to add one more thing. Also, margins, of course, you know, are a function of the input gas prices, more so in the current kind of volatile LNG market. But in the next six months, I believe, you know, four factors—we need to figure out how they will play out.
Speaker #4: First, in general, there is a consensus that the US supplies are going to improve, so in India, the expectation is that it would be, you know, kind of stable. The second part is, of course, geopolitics. Nobody is able to predict what is going to happen to the supplies from the Middle East. Then, about the kind of consumption pull factor from China, Japan – you know, how it's going to play out – one needs to wait and watch. But the other aspect is how the European, you know, gas storage is going to be there, and the kind of winter, in all these things. There are also, you know, talks about whether this El Niño is going to become a super El Niño, and in case of that, then there could be a moderate winter, you know. So, if you really see today in this wired world, how different factors are going to play out, it's right now quite difficult to predict. But, as our data commercialist just mentioned, so what we are focusing on is the segments that we are actually going to cater to. We have a reasonable belief that, with the kind of leverage that we have, particularly with respect to petrol, diesel and all that, we should be able to, you know, keep it in the balance.
Speaker #4: Thank you, sir. I appreciate how challenging the environment is, and I appreciate your efforts to explain the answer as much as you could.
Speaker #4: Thank you, and all the best.
Speaker #2: Thank you.
Speaker #1: Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to only two per participant.
Speaker #1: Should you have a follow-up question, we request you to rejoin the queue. We have our next question from the line of Yogesh Patil from Dholak Capital.
Speaker #1: Please go ahead.
Speaker #3: As you mentioned earlier, 48 percent of the gas sourcing is from the domestic fields or domestic side, like APM, NWG, and HPHT. To our knowledge, in earlier quarters it was around—APM was about 3.3 SMCMD, HPHT was 0.8 SMCMD, and NWG was around 0.9 SMCMD. So I just wanted to have a little more granular understanding on this: how much it is, how much you have received in Q1 FY27 for all these three types of gases, and what is the current status of this domestic sourcing part?
Speaker #4: So so so there has been a little bit I would say the reshuffling of APM and NWG in the in the last quarter and going forward also so as I mentioned around 2.6 million last quarter average was APM and 1.26 was the new well gas as compared to the previous quarter you are rightly it was NWG was less than 1 million so there has been some some changes in the proportion because of the geological issues of the wells across the country and there has been some shift in the new well gas and going forward also likely to happen in this way only.
Speaker #3: HPST ports will remain the same, sir, at 0.8 SMD during Q1 FY27.
Speaker #4: So, HPST was around 0.66 to 0.7, and it is likely to increase because we understand that certain contracts across the country are likely to be closed in September, and there will be some bid offerings coming in. So we will also be trying to capture it aggressively going forward.
Speaker #3: Sir, my next question is related to the CNG consumption figures for the DTC buses and DIMS buses, in million kg. If you could provide that, and additionally, please provide the total CNG volume for this quarter in million kg.
Speaker #4: Okay. So as we mentioned in our opening remarks also see then DTC volumes are now almost zero so last three months if you see it's almost now zero and the last year same quarter it was on an average of 1.5 lakh kg per day so nowadays almost zero however secondly if you see the DIMS volumes so now as compared to the Q4 of the of the last year as and and in comparison to the Q1 for this year the volumes are more or less same it is maintaining at around 1.5 lakh kg per day.
Speaker #3: And CNG volume in million kg, sir, if possible. Total CNG volume in million.
Speaker #4: So, in terms of million kilograms, it is around 5.31 per day for the quarter ended 30th June.
Speaker #3: Thanks. Thanks a lot, sir. All the best.
Speaker #1: Thank you. A reminder to all the participants: if you wish to ask any questions, you may press star and one on your touch-tone phone.
Speaker #1: We have our next question from Amit Murarka with Axis Capital. Please go ahead.
Speaker #2: Yeah, hi. Good evening, and thanks for the opportunity. I missed if you've already shared the split of growth between Delhi and outside Delhi that you usually share in earlier quarters.
Speaker #4: So, I’ll just—for your consumption, I’ll just repeat. So overall growth in CNG is 6 percent across IGL. If you see Delhi, barring DTC, it is around 9 percent, and barring DTC, entire IGL is 11 percent. And if you see particularly the outside, or the new geographical areas (GAs), it is 27 percent.
Speaker #2: Okay, got it. And for DTC, you said that now the volume for the buses has stabilized, and there's no further decline that you're expecting on that counter.
Speaker #4: Yes, you are right. It has almost now come down to zero, maybe hardly 100 to 100 kilograms per day. So, for practical purposes, we can take it as zero now.
Speaker #4: DTC.
Speaker #2: Okay. Now given that the vehicle registration is still going very strong so then the CNG growth now can we expect to kind of get close to maybe double digits or or go to maybe 12 13 percent rate also in the coming quarter then.
Speaker #4: See absolutely see if I tell you recently you must have seen the ED Prime news also in particularly if I share with you one of the July data so almost almost around 4.6 lakhs passenger vehicles were added in the in the month itself of July.
Speaker #4: And Maruti, in particular, has claimed that out of the new vehicles which have been added, almost 42 percent of their vehicles are CNG-based.
Speaker #4: So yes, you are right, CNG is expected to grow in a very, very aggressive way subsequent to the GST cuts 2.0, and we are also witnessing the same. In our outside GS, it is growing at, say, 27 percent—very, very healthy—and in Delhi also around 9 to 10 percent, barring the DTC. Although the base is very heavy, so maybe percentage of growth you cannot correlate actually, but it seems to be otherwise very, very healthy.
Speaker #2: Okay okay understood. Just lastly also on the various changes which had happened on the gas cost side like the changes around the transmission zonal tariffs and as well as a change in the Gujarat GST related changes so all those the benefits are now in the sourcing mix right I mean the current cost that you see on natural gas is reflecting all of that benefit in the numbers.
Speaker #4: Yeah, that's right. But because of this unusual volatility in the wake of the West Asia crisis, that is a bit kind of, what do you say, masked by the current situation we see. We expect that once it eases out, the positive effects of that would be more pronounced.
Speaker #2: Understood. Sure, that's it from me. Thank you very much, and best wishes.
Speaker #4: Thank you.
Speaker #1: Thank you. We have our next question from the line of Vivek Anand from Ambit Capital. Please go ahead.
Speaker #3: Yeah, thanks for the opportunity. Two questions. Number one is on the Delhi EV policy that was recently announced. Now, since this impacts aggregators, commercial vehicles—both auto rickshaws as well as goods carriers—and also school buses, how are you looking at the impact of this on your volumes in Delhi? And secondly, if you could give us some color on the split between these vehicle segments that are impacted or covered by the Delhi EV policy, that would be great.
Speaker #3: The second question is, if you can just help us with the volume trends, year-on-year numbers for MNGL and CUGL, and also absolute MNSC only.
Speaker #3: Thank you.
Speaker #4: Okay. So coming to the Delhi EV policy yes you are right that mandate has already come so effective 1/1/27 there will be no more three wheelers in particularly registration and only EV registrations will happen but we have evaluated and analyzed although we are doing our advocacy meeting Delhi government and other stakeholders also in in revoking or continuing the CNG part but we do not see the much larger impact because only 1 lakh autos are there three wheelers in Delhi and viewing the life of 15 years I think phasing out every year 5 to 6 thousand will only happen and as per our analysis around there will be a less than 1 percent impact in the overall CNG volumes in 2027 and going forward the impact may be less than 3 percent by 2030.
Speaker #4: Similarly, on the commercial vehicles, yes, the new registration again will start from January 1, 2027, and for school buses also, I think the mandate is by 30 percent by 2030—they have to switch over 30 percent.
Speaker #4: So overall we have evaluated the the scenario of the sales volume being lost vis a vis being added through the natural growth in particularly with a very very strong segment from the passenger car vehicles the the expected growth is coming.
Speaker #4: So, by 2030, I think there will be an impact of around 2 to 3 percent on the volumes overall, and we are not viewing much of an impact.
Speaker #3: And to your second question on Anand, how CUGL as well as MNGL have been clocking the growth. First, on CUGL, CUGL has, on a quarter-to-quarter basis, shown growth in terms of CNG. They have clocked 8% growth from around 0.23 MMSCMD to 0.25 that they have clocked.
Speaker #3: And PNG also, they maintained similar volumes of 0.112, just 0.12, but overall, from 0.34 to 0.36 MMSCMD, they have clocked between 6 percent growth they have witnessed.
Speaker #3: But when it comes to MNGL slightly more encouraging numbers have been clocked. In CNG MNGL have clocked 13 percent growth from 1.27 MMSC MD to 1.44 but when it comes to PNG MNGL has clocked a very heavy around 20 9 percent growth point from 0.58 MMSC MD to 0.75 on overall put together from 1.85 MMSC MD they have clocked 18 percent growth to reach 2.19.
Speaker #3: This is primarily driven by, you know, the corresponding quarters—the previous year and this year. Nashik, their Nashik GA, has started getting direct gas supplies from the newly commissioned Samir B pipeline.
Speaker #3: Earlier, their Nashik GA was completely fed through LNG mode, so that had given them a good base, and now, with the pipeline in place, the PNG growth is witnessing a very healthy trend.
Speaker #3: So, yeah. So they have clocked around 18 percent volume growth overall, right. Thanks for the color. Just one follow-up: as far as the Delhi EV policy goes, there is no impact on the MCR territory outside of the National Capital Delhi, right?
Speaker #3: Is is that very clear?
Speaker #4: Absolutely, it is, particularly for Delhi only. So, I don't think there is any impact on Noida or maybe the Gurgaon part.
Speaker #3: Right, right. And just one last follow-up: CUGL.
Speaker #4: As of now, yeah. As of now, exactly. Sorry.
Speaker #3: Okay. My last question is, CUGL's volumes have been stuck in a rut even in FY24. I mean, FY23, 24, 25, the volumes were in the range of 0.312 to 0.33 MMSCMD. Why is it that in these markets, like Kanpur, Bareilly, etcetera, where you would assume that CNG is under-penetrated, why are these markets not growing faster?
Speaker #4: So, I think CUGL, in fact, they have clocked a reasonable 3 percent growth. Yeah, I agree that, you know, they do have potential for more, but yeah, with the improvement in the overall CNG ecosystem, some of the vehicles improving, right, I guess, and also they're coming up with more stations. I think in the coming quarters we should be able to see more growth there.
Speaker #4: Plus, you know the overall input gas cost and the gas price scenario. Also, you know, those kinds of places may be a bit more price sensitive when it comes to their, you know, industrial, and the tax structure also is adding to their woes.
Speaker #4: So I think that could be one of the reasons, you know, when it comes to their PNG growth—particularly CNG—the tax structure is not very favorable.
Speaker #4: But I think CNG, going forward, should be able to show some more improvement.
Speaker #3: Okay. Thank you so much, everyone.
Speaker #4: Thank you.
Speaker #1: Thank you. We have our next question from the line of Gagan Dixit from Elara Capital. Please go ahead.
Speaker #3: Yeah, yeah. Thanks, thanks for taking my question, sir. I have a question—this is about, given the sharp gas cost spike, so is IGL considering any hedging or long-term contracting strategy, I mean, to reduce this spot LNG exposure going forward?
Speaker #4: Yeah, of course. You know, like any other entity, we are looking at it, and then, yeah, we are in fact looking at hedging options as well.
Speaker #4: Particularly because Henry, you know, now provides us with the opportunity—it's a bit stable right now. So, yeah, we are looking at, you know, hedging as an important tool.
Speaker #4: As a part of our overall strategy—in fact, in the month of May, we had already started, because in the month of May, we did have some opportunity with a reasonable price band available.
Speaker #4: So, we have started doing that, and we will continue to do so.
Speaker #3: Thanks sir. And sir my second question is as a new geographies outside the Delhi NCRR they are still renting up. So so typically are they EBITDA per FEM slightly directive versus the mature geographies with Delhi NCR and broadly what is the typical difference between the new geographies and the mature geographies in that broadly in the EBITDA per FEM sir?
Speaker #4: No idea. EBITDA per FEM we if we see the mature geographies we are getting slightly better EBITDA per FEM because of concentrated sales and better volumes.
Speaker #4: In terms of new geographical areas, actually it more depends upon the taxation structure also to some extent. And as and when they get mature and the sales start increasing, we find that economies of scale or benefit is coming to those areas.
Speaker #4: So those new GS, which have started maturing like Devari, we are getting a better EBITDA there. And if the contest process, the more the sales, the better the EBITDA will be.
Speaker #3: Yes. Yes, sir. That's my answer, sir. Yes. All the best, sir. Yeah, thanks.
Speaker #4: Thank you.
Speaker #1: Thank you. We have our next question from the line of Saurav Handa from Citi Group. Please go ahead.
Speaker #2: Yeah. Yeah. Thank you for the opportunity. It's a this is a follow up from a question by one of the other participants. If you can just give a break up of your vehicle wise sales of CNG roughly like how much comes from buses private cars autos etcetera.
Speaker #4: Yeah. Yeah. So I'll give you just a second. Yeah. So for the buses, okay. So, buses, our volume is coming around, overall, around 12 percent.
Speaker #4: For commercial vehicles, it is around 19 percent. For taxis, it is around 14 percent. For three-wheelers—autos—it is around 7 to 8 percent. And primarily, it is from the passenger car vehicles, to the tune of around 48 to 50 percent.
Speaker #4: Out of our 7 million, you can say the CNG sales. That's it.
Speaker #2: Okay, got it. So, on autos, when you said 7 to 8 percent, the Delhi portion of this will be like 3 percent. Is that what you were trying to imply?
Speaker #4: So, no, no, I was trying to say that because the phasing out will happen over a span of 15 years, no more new registrations will happen.
Speaker #4: But the phasing out will happen because there will be a change of the permit also. So every year, like 5,000 to 5,500 vehicles will go back.
Speaker #4: They'll be out of the system. So by 2030, we are expecting around maybe less than 1 percent, particularly in auto sales. So this 6 to 7 percent will keep on reducing after every 5 years, maybe down to 2 to 3 percent.
Speaker #4: It will be like that.
Speaker #2: Okay. And so this 7 to 8 percent, would you have an idea how much actually is just the Delhi portion of it, versus in...
Speaker #4: Primarily, it is Delhi only. Primarily, you can say around 70 to 80 percent will be Delhi only.
Speaker #2: Okay, got it. Thank you. And my second question was on this Gurgaon-Faridabad — you made some comments initially on the areas that are not authorized to you. I sort of missed that.
Speaker #2: Could you just elaborate on that?
Speaker #4: So, we have been contesting. There is a litigation going on, but the conditional part of the area which has been given to us by the regulator, we have already accepted.
Speaker #4: And going forward, for development, because in the interest of the consumers, why deprive them of natural gas, whether it is piped natural gas or CNG?
Speaker #4: So internally, the company has decided to conditionally accept and develop going forward.
Speaker #2: Okay, so just to clarify, even in the areas that are not, say, in Gurgaon—the areas that are not authorized to IGL—but you have got some conditional approval to even expand your network in these areas?
Speaker #2: Is that correct?
Speaker #4: Well, they were authorized to IGL, but we have not accepted in the past because of our litigation going on, and we have been contesting at various forums.
Speaker #4: But now, seeing the push in natural gas, particularly in piped natural gas, as well as the growth anticipated in CNG, because NCR is also a very, very high growth potential area.
Speaker #4: So, a conscious call has been taken and we have accepted, conditionally, to move forward.
Speaker #2: Okay. So that means in the entire Gurgaon region, now you would be in.
Speaker #4: Not the entire Gurgaon. No, I'll make it clear. Actually, see, within the entire Gurgaon, part of the area was earmarked only for IGL.
Speaker #4: Earlier, that part portion was also—since our entire claim was that the entire Gurgaon is for IGL. The part portions, the services were not commenced.
Speaker #4: But now we have given the situation right now and then why to deprive of the people who are there in those part portions for their share of gas.
Speaker #4: So, that part we have started commencing the services, but not the entire one.
Speaker #2: Okay, that's clear. And in Faridabad, then.
Speaker #1: Sorry to interrupt you, Saurav. Maybe the question was rejoined with you.
Speaker #2: Sorry, it’s just the same question. I’m just clarifying.
Speaker #1: Sure.
Speaker #2: So in Faridabad, there was no part authorization, right? In Faridabad, it was completely out of IGL.
Speaker #4: Yes. Yes. So we'll be developing that. Partly it is with us and partly, and majorly, it is with somebody else.
Speaker #2: Right. So nothing very different from what the situation was earlier. So, just wanted to confirm that. I got it. Thank you, sir.
Speaker #1: Thank you. A reminder to all participants: please restrict yourself to only two questions per participant. Should you have a follow-up question, we request you to rejoin the queue.
Speaker #1: Next question is from the line now. Mayank Maheshwari from Morgan Stanley, please go ahead.
Speaker #5: Hi sir. Thanks for doing the call. For the question I had was more related to your growth strategy around inorganic growth. Considering the Delhi EV policy and increasingly more focus on the EVs how will you kind of thinking about inorganic growth opportunities to consolidate the entire market?
Speaker #4: We see inorganic growth right now. We do not see the CBD sector, in terms of new authorizations, also—it’s relatively new. So, as and when an opportunity presents, we would be able to look at those other areas as well.
Speaker #4: But the general policy framework is still evolving, you know, related to how they'll open up the other areas. One remains to see, but at this stage we believe that even in our own newer GAs, you know, there is good scope, as you can see in our—you know—the kind of growth that we have been achieving in our newer GAs.
Speaker #4: So, progressively, their share is already improving. So we are, right now, focusing on expanding our operations in newer GAs.
Speaker #5: So sir in terms
Speaker #2: Of capex now, going forward, if you can give us a guidance—is there a step change increase in capex because of this focus on natural gas and PNG, or do you think the current run rate will kind of sustain?
Speaker #4: So, you are right. I think, in the first quarter, we have spent around ₹327 crores, and our plan or aspiration there has undergone certain changes, definitely because of the thrust on the PNG infrastructure development going forward.
Speaker #4: So, roughly, around 1,800 to 2,000; still our aim is like that only. And spending around 1,200 to 1,300, or maybe maximum 1,500, on the core.
Speaker #4: And if we get some other opportunities for business development diversification, we'll have another 5–600 there also.
Speaker #2: Got it. Thank you.
Speaker #1: Thank you. We have the next question from the line of EA Sundaram from Virgil Rock Capital. Please go ahead.
Speaker #3: Yeah, good afternoon, sir, and thanks for the opportunity. My first question is, you know, there have been a couple of major developments initiated by the Delhi government, and that has caused some sort of apprehension in the minds of businesses.
Speaker #3: One is the lack of registration for auto rickshaws going forward, and the second one was the moving of the DTC buses from CNG to electric.
Speaker #3: So, my question, sir, is: is there any indication or any move that you are aware of that the Delhi government may employ a similar policy on four-wheelers also?
Speaker #3: And do you see any any indication of that? And the the follow up question on the first question itself what does the proportion of PNG vehicles in the new four wheeler registrations in the Delhi area in the recent months?
Speaker #3: Can you throw some light on that?
Speaker #4: Yeah, yeah. So, I will answer your question, the second part first. See, from the data that we have and what we have analyzed, the new registrations that are happening, particularly in Delhi, almost 42% of the passenger vehicles are being registered on CNG.
Speaker #4: This is in the current scenario. You can see, you can take it in the last six months or so; that is point number one.
Speaker #4: So overall, if we look at the entire vehicle population of Delhi and the surrounding areas, it is around 24 to 25% on PNG.
Speaker #4: Secondly, see, we have been advocating at various forums, and what we understand—whether it is at the ARI level, whether it is at the ICAT level, whether it is at the CAQM level, or whether it is with the Delhi government.
Speaker #4: See, going forward, all the fuels are going to coexist in the current scenario. Viewing the geopolitical situations and all, energy security remains the topmost priority.
Speaker #4: And there will not be a shift to a single energy fuel, whether it is conventional fuels, whether it is CNG as a transition fuel, or it will be EV.
Speaker #4: So, it will be a mix of all the fuels and, going forward, we are anticipating a very, very robust growth from PNG, particularly on the basis of the information or data which we shared with you.
Speaker #3: Okay. See, the second question is—you know, yes, of course, this war in West Asia has caused some disturbance in your margin profile.
Speaker #3: But we are also seeing that after June there has been a sharp fall in in global natural gas prices. So can you share with us what is the average cost of gas per cubic meter that you had in the in the first three months of this financial year and what is it what has it been in July?
Speaker #3: What is the cost of gas that you are having in July?
Speaker #4: Oh, see, I think it will be very, very difficult because these are some of the commercial terms and all. But just as a guidance, it is hovering around—first quarter—around 40 to 45 rupees per SCM, you can say.
Speaker #4: July onwards, still the turbulence is there. And there has been some increase, yes, it is. But it will be difficult to get into the nitty gritty, viewing the commercial proposition, so it will be a little bit.
Speaker #3: But I'm I'm asking I'm asking this because you are concerned of returning to the EBITDA per SCM of about 7 to between 7 to 8 rupees.
Speaker #3: That is the reason I'm asking you.
Speaker #4: Oh so so so sir I had already see we had already mentioned and I think it was a guidance for a long term. For the going forward it is not in the immediate quarter or maybe like that.
Speaker #4: Yes, our aspiration guidance is always there to be there. But in such an unpredictable and volatile situation of geopolitics, it will be very, very difficult to comment for the quarter.
Speaker #3: Okay okay. My my other question sir is is there there is you know we we saw one report by PNGRB where one of the recommendations of that of that of that report was that natural gas should be brought under the ambit of the GST.
Speaker #3: Is there any such move that you are aware of, which you can share with us?
Speaker #4: So actually, the Ministry of Petroleum and Natural Gas has consistently been supporting. So within the government setup, you know, when the administrative ministry is strongly supporting a particular cause, that's a good sign.
Speaker #4: But GST as you would say you know it also it's a both central as well as a state kind of subject. So it will be very difficult to make any second guessing on you know whether anything would come up.
Speaker #4: It's very difficult to say because it's kind of within the GST Council's prerogative.
Speaker #3: Yeah, yeah, I understand that. But I—I just want to know.
Speaker #4: There is no such kind of available evidence to suggest that there's any big change happening there.
Speaker #3: Okay. See, one of my final questions, sir, is about one of the points made in a previous question. This was made by the management some time ago.
Speaker #4: Oh sorry to interrupt
Speaker #2: You, sir. Due to the shortness of time,
Speaker #4: Whether we can just have this last question for the question, please.
Speaker #2: Okay okay.
Speaker #3: Okay, thank you. See, my question is—you know, it was mentioned that originally the entire Gov round was awarded to IGL, but then it went into some litigation.
Speaker #3: I assume, if I remember correctly, it was because of some valuation issues that it went into litigation. But now, IGL has been awarded one third of Gov Round.
Speaker #3: Is there, is there—the other two parts of the government round, are they still under litigation or is there any chance that that part will come into IGL's ambit in the future?
Speaker #3: Is there any possibility of that?
Speaker #4: Yes, you see, it is like that. It is still under litigation and we are contesting because initially, as per the central government authorization, it was to IGL and we are contesting forward.
Speaker #4: We have not at all surrendered as such.
Speaker #3: See, but one point we need to remember is, even in the portions where right now it is disputed and, you know, the other party is operating, the gas is still, you know, on a bulk basis proceeding from IGL only.
Speaker #3: So to that extent, the molecules actually still are going through us only. So we need to understand that the future, from a specific point of view, you know, you start owning that retail consumer base—that’s the thing that’s going on.
Speaker #3: But you need to keep that in your mind as well.
Speaker #2: Yeah, but there's nothing like having the final, you know.
Speaker #3: Yeah, you are right. But just adding that point, you know, so that's how it is.
Speaker #2: Okay, okay. Thank you. For the sake of time, I'll stop here and allow others to ask you questions.
Speaker #1: Thank you. Ladies and gentlemen, due to time constraints, that was the last question of the day. Participants whose questions have remained unanswered may approach Mr. Manjit with the management.
Speaker #1: I now hand the conference over to the management for closing comments. Over to you, sir.
Speaker #4: Good evening to all of you. I, on behalf of the IGL management, would like to thank all of you for participating in the early call for Q1 2027, and special thanks to PhillipCapital and Nathan for organizing this for IGL.
Speaker #4: We'll see you soon, shortly, somewhere in the next conference or maybe in person. So, thank you, all of you, for joining.
Speaker #1: Thank you, sir. On behalf of Philip Capital Private Limited, that concludes the conference. Thank you for joining us, and you may now disconnect your lines.
Speaker #3: Thank you.
